Managing customers rights on the markets by Gilles Vercken, Lawyer

14 rue Séguier – 75006 Paris
Tel. 01 42 21 34 75 – Fax 01 42 21 32 77 – contact@gillesvercken.com
Webgame Conference 2013 – Light Talk
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« Managing customers rights on the markets »
WebGame Conférence
June 20, 2013

14 rue Séguier – 75006 Paris
Tel. 01 42 21 34 75 – Fax 01 42 21 32 77 – contact@gillesvercken.com
Webgame Conference 2013 – Light Talk
WHICH RIGHTS DO HAVE YOUR VIDEOGAMES USERS ?
(CONSUMER LAW, COPYRIGHT LEGISLATION, FILES
PROPERTY, RESALE POSSIBILITY, PERSONAL DATA)
FIRST THINGS TO THINK OF
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Webgame Conférence 2013 – Light Talk
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The relationship with the videogames users
legal framework
It’s a contract … (1)
concerning a specific product … (2)
concluded with consumers (3).

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1. It’s a contract
Videogames
Publishers
Customers
Distribution
platforms
USE
RESELL ?
UGC
Contract
Law
Data
Protection
Copyright Consumer
law
OTHER
€
€

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The relationship between the user and the game publisher must be thought through and legally
framed
Why ?
Two goals :
• Secure the relationship while being legally compliant to avoid risks – legal risks as well as risks
related to reputation (complaints from clients, action of the French General Directorate for
Trading, Consumer Affairs and Fraud Control, action of the French Data Protection Authority)
• Value the consumer’s data to your profit (avoid the resell or the game, the account, the UGC…
exploit the personal data)
In ten minutes …, the key points …

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Be careful to take into account the global dimension
• You can choose the law that will govern BUT
• There must be an objective link between the contractual relationship and the chosen regulation ;
it would otherwise be a fraudulent evasion of the law (e.g. : you are established in the UK, the
user is in France and you choose the laws of Delaware, US… wrong choice)
• Even if the regulation applying to the contract is not the french law, some rules will prevail as
public policy provisions whenever the consumer resides in France (consumer protection,
personal data law)

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It’s a contract …
… that’s must observe the contract law ….
• Definite object (what is exactly the service provided ?)
• Evidence of consent
• Stipulate a double click
• Keep the confirmation e-mail
• Keep the applicable version of the terms of use
• Do not change the terms of the contract unilaterally

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2. Concerning a particular product
A video game is a complex artwork protected by copyright
• For the software part : the specific regulation on software shall apply
• For the non-software part (graphics, scripts, music) : the general copyright rules shall
apply
(Cour de cassation, June 29, 2009)

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Two topics :
2.1 Second-hand market
2.2 What is the legal statut of the contents generated by videogame users ?

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2.1 Second hand market
→ Question : can the user resell the videogame ?
• Traditionnal approach
Yes, if the videogame is incorporated within a physical support
No, if the videogame is available online
• But a decision of the European Court of Justice rises some doubts : CJUE, Usedsoft v/ Oracle, July 3rd, 2012
A software publisher which provides the file of the software on CD or through downloading, with user licence for
an unlimited period, does make a sell legally speaking.
Such a publisher can no longer oppose the resale of that copy.
And this even if the user license prohibited explicitly the possibility of reselling the software.

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2.1 Second hand market
→ Question : could that decision apply to the videogames ?
• Answer : maybe it could, maybe not…
• Precaution : modify the user licences so as to shorten the length of their validity, and/or stipulate
a subscription system, and/or state clearly that the files’ property shall not be transferred to the
user

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Caution : the user account is not a content… The user must be allowed to create his personnal account, even though
the question is controversial.
What about the copyrightable content created by the user ?
Several possibilities :
• The publisher acquires the rights on the created content on exclusive terms, and the user is not allowed to use
them apart within the game
The legal issue in this case under french law resides in the following of the imperative rules governing such a
transfer : written act, usually providing a financial compensation…
• The publisher acquires a mere user licence, without any financial compensation… Should then be the user
allowed to « market » the rights generated by his creation ?

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Way out :
• The publisher can organize himself a market for the goods generated within the game itself.
• The advantage is to receive benefits.
• The disadvantage lays in the operational and legal complexity of the proceeding.

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3. Concluded with consumers
Two topics
3.1 Consumer law
3.2 Data protection

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3.1 Consumer law - General rules
• General obligation of information : article L. 111-1 of consumer code
All business suppliers of goods or services must, prior to conclusion of the contract, ensure that the consumer is
made aware of the essential characteristics of the goods or services.
• Price and conditions of sales : article L. 113-3 of consumer code
All product vendors or service providers must, by means of marking, labelling, bill-posting or by any other
appropriate procedure, inform the consumer of prices, any limitations of contractual liability and special terms of
sale.
• Information on delivery date : article L. 114-1 of consumer code
In any contract for the sale of goods or the supply of services to a consumer, the businers must, when the delivery
of the goods or the supply of the services is not immediate and if the agreed price exceeds the thresholds fixed by
regulation, indicate the final date by which it undertakes to deliver the goods or perform the services.

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3.1 Consumer law - Specific rules for distance selling of goods and services :
• Required information : article L. 121-18 of consumer code :
« Without prejudice to the information referred to in Articles L. 111-1 and L. 113-3 and that provided under Article
L. 214-1, the contract offer must contain the following information:
1 The name of the seller of the product or the service provider, his telephone number, his address or, in the case of a
legal entity, its registered office and, if different, the address of the establishment responsible for the offer;
2 The delivery costs, where applicable;
3 The terms of payment, delivery or execution;
4 The existence of any right of withdrawal, save for cases in which the provisions of the present section exclude the
exercise of such a right;
5 The price and term of validity of the offer;
6 The cost of using the distance communication system when it is not calculated in reference to the standard rate;
7 Where applicable, the minimum term of the proposed contract, when it relates to the continuous or periodic
supply of goods or services.
Such information, the commercial nature of which must be indicated unequivocally, shall be communicated to the
consumer clearly and comprehensibly by any means compatible with the distance communication system used.
If telephone canvassing or any similar technique is used, the professional must explicitly indicate his identity and
the commercial nature of the call at the beginning of the conversation ».

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• Confirmation of informations : article L. 121-19 of consumer code :
« I. - The consumer must receive the following in writing or on some other durable medium available to him, in
good time and upon delivery at the latest:
1 Confirmation of the information referred to 1 to 4 of Article L. 121-18 as well as that indicated in Articles L. 111-
1 and L. 113-3 and that provided pursuant to Article L. 214-1, unless the professional fulfilled that obligation
before the contract was concluded;
2 Information concerning the terms and conditions applicable to exercise of the right of withdrawal;
3 The address of the supplier's establishment at which the consumer may make any complaints;
4 Information concerning after-sales service and commercial guarantees;
5 The conditions applicable to cancellation of the contract if it is open-ended or has a term or more than one year.
II. - The provisions of the present article are not applicable to services which are provided once only via a distance
communication system and invoiced through that system by the operator, with the exception of 3 ».

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• Right of withdrawal :
Article L. 121-20 of consumer code : « The consumer has seven clear days in which to exercise his right of
withdrawal without giving a reason therefor or incurring a penalty, with the exception, where applicable, of the cost
of returning the goods. The consumer may exceed this time limit in the event of him being unable to travel and
simultaneously needing to call for an immediate service which is essential to his conditions of existence. In which
case, he shall continue to exercise his right of withdrawal without giving a reason therefor or incurring a penalty.
The time limit indicated in the preceding paragraph runs with effect from receipt of the goods or, for services, from
acceptance of the offer.
When the information referred to in Article L. 121-19 has not been provided, the time limit applicable to exercise
of the right of withdrawal is increased to three months. If such information is provided within three months of
receipt of the goods or acceptance of the offer, however, this shall activate the seven-day time limit referred to in
the first paragraph. If the seven-day time limit expires on a Saturday, Sunday or public holiday, it is extended to the
next working day ».
Article L. 121-20-1 of consumer code : « When the right of withdrawal is exercised, the professional is required to
repay the consumer without delay and within thirty days, at the latest, of the date on which the said right was
exercised. Any sum outstanding thereafter shall bear interest at the legal rate in force ».

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• Date of delivery : article L. 121-20-3 of consumer code :
« Unless otherwise agreed between the parties, the supplier shall fulfill the order within thirty days of the day
following that on which the consumer placed his order for goods or services.
In the event of a supplier failing to perform a contract on account of the goods or services ordered being
unavailable, the consumer shall be informed of such unavailability and, where applicable, shall be reimbursed for
any sum paid without delay, and within thirty days at the latest. Any sum outstanding thereafter shall bear interest
at the legal rate.
However, if such an eventuality was foreseen prior to conclusion of the contract or is provided for therein, the
supplier may provide goods or services of equivalent quality and price. The consumer shall be informed of that
eventuality clearly and comprehensibly. The cost of returning goods following exercise of the right of withdrawal
shall be borne by the supplier in such cases and the consumer shall be informed thereof.
The professional is automatically liable towards the consumer for the proper fulfilment of the obligations deriving
from a distance contract, whether such obligations are to be fulfilled by the professional who concluded the
contract or by other service providers, without prejudice to his right of recourse against the latter.
He may gain exemption from some or all of his liability, however, by proving that the non-performance or poor
performance of the contract was attributable to the consumer, to an unforeseeable and insurmountable fact of a
third party, or to an instance of force majeure ».

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3.1 Consumer law - Public policy and applicable law :
• Article L. 121-20-16 of consumer code : « The provisions of the present section are a matter of
public policy ».
• Article L. 121-20-15 of consumer code :
« When the parties have determined that the contract shall be governed by the law of a State which is
not a member of the European Community, a judge before whom that law is invoked is required to
disregard it and apply the more protective provisions of the law applicable at the consumer's normal
place of residence deriving from transposition of Directive 97/7/EC of the European Parliament and
Council dated 20 May 1997 concerning consumer protection in regard to distance contracts, and
Directive 2002/65/EC of the European Parliament and Council dated 23 September 2002 concerning
distance marketing of financial services to consumers, when the contract has a close link with the
territory of one or more European Community Member States; this condition is deemed to have been
met if the consumers are resident in a Member State ».

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3.1 Consumer law - Consequencies :
Draw up a clear offer… and not misleading for the user :
The DGCCRF is the agency in France that has the investigative authority and the power to impose
sanctions on companies in order to discipline the violations against the consumer protection
regulation.
In 2012, the DGCCRF led an inquiry on the Terms of use applied by online videogames publishers
(focused on free-to-play games)

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3.1 Consumer law – Main critics :
• Deceptive offer : for example, the user starts playing the game on a free to play basis and then
has to pay, or to buy add-ons, and the point where the game stops to be free is not clearly
identified and the free to play part of the game is not autonomous
Or else, when it is specified that the user has to be connected online to be able to play
• What happens if the publisher decides to stop distributing the game ?
The contract must:
- Specify a notice, of which the term is long enough (maybe 6 months?)
- Provide for a refund of all sums paid which were paid over the term
• Monetization within the game: the consumer’s information has to be irreproachable and all
related questions must be taken care of with particular care

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3.2 Data protection :
Three important aspects
• Respect persons’ rights
• Comply with formalities of the French Data Protection Authority
• Internally manage personal data

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Reminder about the principles
• Collection and treatment of data must be loyal and lawful
• Purpose of the collection must be explicit and legitimate
• Adequacy, relevance and proportionality of the personal data to the purpose
• Correctness, completeness and update of personal data
• Non conservation in a form enhancing identification beyond the term necessary to the purpose

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Concrete applications
The person must be informed of his or her rights before validating the Terms of Use, i.e., on the
subscription screen.
The person has to be clearly explained the procedure in case the login information are retrieved and
cookies are placed on the computer.
The person must expressly agree to his or her personal data being transferred to commercial
partners.
There is a specific regime for all personal data sent to a country outside of the European Union.
It is necessary to comply with formalities of the French Data Protection Authority because the
penalties can be high.

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Thanks you so much …
And any question ?

Managing customers rights on the markets by Gilles Vercken, Lawyer

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